Glossary of Terms

Deceased

One who has died.

Deed

A document that lets you transfer title of your real estate to another person(s). Also see warranty deed and quitclaim deed.

Disclaim

To refuse to accept a gift or inheritance so it can go to the recipient who is next in line.

Discretion

The full or partial power to make a decision or judgment.

Disinherit

To prevent someone from inheriting from you.

Distribution

Payment in cash or asset(s) to one who is entitled to receive it.

Durable Power of Attorney for Asset Management

A legal document that gives another person full or limited legal authority to sign your name on your behalf in your absence. Valid through incapacity. Ends at death.

Durable Power of Attorney for Health Care

A legal document that lets you give someone else the authority to make health care decisions for you in the event you are unable to make them for yourself. Also called a health care proxy or medical power of attorney.

Equity

The current market value of an asset less any loan or liability.

Estate

Assets and debts left by an individual at death.

Estate Taxes

Federal or state taxes on the value of assets left at death. Also called inheritance taxes or death taxes.

Executor

Person or institution named in a will to carry out its instructions. Female is executrix. Also called a personal representative.

Federal Estate Tax Exemption

Amount of an individual’s estate that is exempt from federal estate taxes. In 2008, the exemption amount is $2 million. Under current law, it is scheduled to increase to $3.5 million in 2009, disappear in the year 2010 (when the federal estate tax is scheduled to be repealed) and return in 2011 at $1 million.

Fiduciary

Person having the legal duty to act primarily for another’s benefit. Implies great confidence and trust, and a high degree of good faith. Usually associated with a trustee.

Funding

The process of transferring assets to your living trust.

Gain

The difference between what you receive for an asset when it is sold and what you paid for it. Used to determine the amount of capital gains tax due.

Generation Skipping Transfer Tax (GSTT)

A steep tax (currently 45%) on assets that "skip" a generation and are left directly to grandchildren and younger generations. Everyone has an exemption from this tax. In 2008, the GSTT exemption is $2 million.

Gift

A transfer from one individual to another without fair compensation.

Gift Tax

A federal tax on gifts made while you are living. Currently $12,000 per person per year is exempt from gift tax. Also see "Annual Exclusion."

Grantor

The person who sets up or creates the trust. The person whose trust it is. Also called creator, settlor, trustor, donor or trustmaker.

Gross Estate

The value of an estate before debts are paid.

Guardianship

See "Conservatorship."